Your lender is going to want a complete picture of your finances when you apply for a mortgage. One of the pieces they will use to decide whether you will get a mortgage – and what interest rate you’ll get – is your credit score.
In fact, Bankrate.com says, your credit score is the most influential factor in determining your interest rate. Those with higher scores get lower interest rates. Scores below 620, Bankrate reports, may have a hard time getting a mortgage at all, though it’s not impossible.
Why? Lenders take a risk every time they loan money, and they want to make sure you are going to fulfill your end of the bargain. The higher your credit score, the more secure the lender feels that you will make your payments and make them on time.
If you’re worried about your credit score, it’s worth your time to take advantage of the free credit reports you’re allowed each year from the major reporting agencies. If you check your report at least a year before buying, Bankrate says, you’ll have time to fix errors or change how you use your credit.